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Reading Buy-to-Let Guide

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    Is Reading the Best Place for Buy-to-Let Property Investment?

    Reading is a town in Berkshire, in the South East of England. The area is becoming increasingly attractive to buy-to-let investors due to its easy access to London and high rental demand. 

    The recent opening of the Elizabeth Line has made it more convenient than ever to commute into London from Reading, so rental demand is expected to grow even more. The town’s regeneration projects also look set to make the area more profitable for buy-to-let property investors.

    So, is Reading the best place for investors to stake their hard-earned cash? Our guide will give you the lowdown on UK buy-to-let property investment in this Thames Valley town.

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      Buy-to-Let Property Prices in Reading

      Rightmove reports that the average sale price of Reading properties in the last year is £430,284. This is 7% up on the previous year and 14% on 2020 prices.

      While house prices are generally higher in the South East compared to the rest of the UK, Reading prices are lower than the area average, suggesting it is possible to find a good deal.

      According to Zoopla’s July 2023 UK House Price Index, house prices fell in the South East compared to last year, following a recent trend of sluggishness across the country, especially in the south of England. 

      But future property market predictions point to a return to growth, so it could be worth investing now rather than later to maximise potential returns on capital value.

      For more on this, consult our UK House Price Index.

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      Buy to Let Rental Market in Reading

      The average rental yield in Reading is around 4.5%, but this figure can differ a fair amount depending on the property’s area.

      Rents have experienced a steep climb in Reading over the past few years in response to increased rental demand. The average rent for a property in Reading is £1,556 per month. This is much higher than the UK average of £704, meaning buy-to-let investors can make a hefty gross rental income every month.

      Reading is popular with commuters in London because of convenient public transport and road links and a more affordable cost of living than in the capital. Although the Reading lifestyle is generally cheaper than London’s, Reading still ranks as one of the most expensive places in the country to rent.

      Buy-to-let investors may also find success investing in student accommodation in Reading. 

      The University of Reading is considered a top 30 UK university, and its three campuses are all based around the Town Centre, with over 23,000 students enrolled at the institution.

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      Investment Properties for Sale in Reading

      There’s a good mix of different property types in Reading, including the usual terraced houses, semi-detached and detached houses, and apartments. In Reading town centre investors can find modern, newly-built properties as well as older properties such as Vistorian terraced housing.

      But what is the most in-demand type of property for buyers in Reading? According to Rightmove, The most popular type of property sold in Reading during the last year was terraced housing, selling for an average price of £362,379. This was followed by semi-detached properties, selling for an average of £466,598, while flats went for £253,819.

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        Buy-to-Let Investment in Reading: Area Breakdown

        Regarding key areas for buy-to-let investments, Reading Town Centre is popular with students and gives easy access to London for commuters.

        There are also many attractive residential locations to the east. For instance, Earley is convenient for the nearby Thames Valley Business Park, a Reading employment hotspot. Woodley is a large suburb, popular with families and commuters, with its own self-contained community and amenities. Winnersh is convenient for transport links thanks to Winnersh and Winnersh Triangle train stations.

        In the north of Reading, on the other side of the River Thames, you can find more expensive areas such as Caversham.

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          Reading Town Centre

          Average Property Prices in Reading Town Centre (RG1)

          The average property price in RG1 is £320,845.

          Average Rental Yield in Reading Town Centre (RG1)

          The average rental yield in RG1 is 6.66%.

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          Caversham

          Average Property Prices in Caversham

          The average property price in Caversham is £515,566.

          Average Rental Yield in Caversham

          The average rental yield in Caversham is 3.61%.

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            Earley

            Average Property Prices in Earley

            The average property price in Earley is £443,582.

            Average Rental Yields in Earley

            The average rental yield in Earley is 4.55%

            Reading Riverside

            Woodley

            Average Property Prices in Woodley

            The average property price in Woodley is £462,574.

            Average Rental Yields in Woodley

            The average rental yield in Woodley is 4.38%

            (Averages taken from Rightmove, rental yield average calculated with figures from housesforsaletorent.co.uk)

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              What is the Best Area of Reading to Invest in?

              Property prices are generally high in Reading, especially in the affluent neighbourhoods of Caversham, resulting in a lower gross rental yield.

              The steady demand and relatively more affordable housing in the eastern suburbs, such as Earley and Woodley, make for a more agreeable average rental yield.

              But the town centre, as covered by the RG1 postcode, can offer a higher gross rental yield thanks to the lower property prices and high rent.

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                Why You Should Consider a Buy-to-Let Investment in Reading

                Regeneration

                Ambitious regeneration projects can create job opportunities, help the local population grow, and positively affect capital growth, making them good news for property investors. 

                Reading has been attracting many investments, thanks to increasing interest in the area, and several developments have been put forward targeting the Reading Town Centre. For example, two of Reading’s retail parks are being transformed into residential quarters. The Kings Meadow View and Reading Station Hill projects will create over one thousand new homes and revamp these ailing locations. 

                The area around Queen Victoria Street and Friar Street, described as the ‘Heart of Reading’, is undergoing an extensive regeneration programme, set for completion by 2050. The Oracle shopping centre will also be transformed into new build apartments, a revitalised retail space, a new cinema and a co-working space.

                For details on sustainability and property, take a look at our guide to Liverpool regeneration in 2024.

                England’s ‘Silicon Valley’

                The strong employment prospects in Reading keep demand for rental properties high and are expected to improve even further, owing to the town’s reputation as a hub for the UK tech sector.

                Also known as the UK’s Silicon Valley – due to the high concentration of tech and finance companies in the area – Reading’s M4 Corridor is home to companies such as Cisco, M&G, Hibu and Ericsson, among others.

                The Thames Valley Business Park is located on Reading’s eastern outskirts and accommodates over 20 major companies, including Microsoft and Oracle.

                A Hotspot for London Commuters

                As mentioned, Reading is a popular place for London workers living outside the capital. Living in London often comes with a luxury price tag, so property prices and rents in Reading are generally cheaper, and the cost of living is generally more affordable.

                With the opening of the Elizabeth Line in 2022, the commute has become even faster and easier, with average journey times of around 45 minutes and the quickest route taking a mere 23 minutes.

                Reading is a traditional commuter town, and this reputation is getting even more substantial as more renters try to escape the high living costs of London investment properties, subsequently driving up demand, rents, and capital value.

                We have added some other Regional Buy To Let guides below:

                1. Islington Buy to let guide

                2. Leicester property investment guide

                3. Birkenhead property investment guide

                4. Coventry property investment guide

                 

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                  Reading New Builds

                  There’s an undersupply of available rental properties across the UK, including Reading. For this reason there’s been renewed calls for more new build developments in Reading to help meet the demand.

                  Reading Council is working on delivering new housing for the local community. Reading is also often sought after by private developers, meaning there are plenty of opportunities to invest in new developments.

                  Reading is a popular spot for new builds, as are other areas outside of London, meaning it could be worth looking at Watford new-builds or targeting other commuter hotspots to get a real picture of what’s available.

                  However, new-build properties are known to be pricier than older properties, and Reading is already generally an expensive area.

                  Investing in new builds in Reading could be costly, and better returns may be possible by investing in cheaper cities in the North of England.

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                  Off-Plan Property

                  Off-Plan Property in Reading

                  Investing off-plan is one way to get a good deal on a property investment, and it’s growing in popularity as new builds gain more attention from investors.

                  As an in-demand city, there are many new-build projects in Reading and options for off-plan investment for certain developments.

                  The downside is that Reading is a particularly expensive area to invest in, even with the discounts that may be provided when investing off-plan. Therefore, it’s worth looking at major Northern cities such as Liverpool and Manchester, where there are many off-plan opportunities but at a more affordable price.

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                    How Does Reading Compare to Other UK Regions When It Comes to Buy-to-Let?

                    Reading’s substantial employment opportunities and proximity to London have made it a rental property hotspot in the past few years. This demand is set to remain high, with continued interest and investment in the area expected throughout the coming years.

                    Rental demand is a significant benefit of this location, but other areas of the UK are also experiencing high demand due to the current deficient housing supply. Many young professionals have recently moved away from London and the South to seek more affordable lifestyles in the North. Demand for rental properties is up across the country, but the North West has seen the most considerable increase in rental enquiries per property.

                    If the steep property prices of Reading are off-putting, it’s worth noting that properties in the North are cheaper on average compared to the South of England. While gross rental income may be lower, you can save on initial costs with a more affordable property and see returns quicker with a more generous rental yield.

                    Read our Buy-to-Let Budget guide for a full breakdown of the costs involved with property investment.

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                    Want to Invest in Reading in 2024?

                    Reading is a desirable location for many investors and can be considered a relatively affordable alternative to investing in London property. Rental demand is climbing, and with extensive regeneration projects on the cards to boost the local population and employment, it seems this won’t change any time soon.

                    But the high cost of property will be a barrier for some, so it’s worth exploring other UK areas with cheaper average property prices and better rental yields, such as Manchester and Liverpool.

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                    Author

                    Jessica Ferris

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                    Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.

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